Look, I like Apple too but don’t get too high on their supply.
Apple does the possible but extremely challenging, frequently. Given enough time and money, they probably could be at least competitive with Google, but how much time? How much money? What are the opportunity costs to doing this and not investing somewhere else where they are either stronger or there’s a more lucrative future business to be had (like their mixed reality headset)?
There would be an opportunity cost even without Google’s money. Google may not be what it once was but it is definitely still the best in the free-tier search engines you can use today and in 2007 it was several heads and shoulders above anything else Apple could have picked as the default on iPhones.
If payment from Google (or anyone else) isn’t a factor in what Apple uses as the Safari default, it is not at all clear that this change alone would make it worth Apple’s time to develop their own search engine. You have an easier argument with that change, but it’s not a slam dunk.
Apple does the possible but extremely challenging, frequently. Given enough time and money, they probably could be at least competitive with Google, but how much time? How much money? What are the opportunity costs to doing this and not investing somewhere else where they are either stronger or there’s a more lucrative future business to be had (like their mixed reality headset)?